I'm the editor of the investment newsletter PowerTrend Profits and the trading service ETF PowerTrader as well as the host of PowerTalk. All of that capitalizes on my near 20 years in the investment industry, nearly all of it breaking down industries and recommending stocks. In that time, I've been ranked an All Star Analyst by Zacks Investment Research and my efforts in analyzing industries, companies and equities have been recognized by both Institutional Investor and Thomson Reuters’ StarMine Monitor. In my travels, I've covered cyclicals, tech and more, which gives me a different vantage point, one that uses not only an ecosystem or food chain perspective, but one that also examines demographics, economics, psychographics and more when formulating my investment views. The question I most often get is "Are you related to…."

How To Profit From The Next Big Scarce Resource

‘One of the several investment strategies that I employ in my newsletter PowerTrend Profits entails looking at scarce resources. Most tend to think of oil, gold and other precious metals and at one time rare earth elements. That tends to have investors looking not only at the commodities, but also a plethora of exchange traded funds (ETFs) and individual companies. Some examples that spring to mind include the SPDR Gold Trust ETF (GLD), United States Oil Fund LP (USO), and PowerShares DB Precious Metals Fund (DBP) as well as Barrick GoldBarrick Gold, Exxon MobilExxon Mobil, and MolycorpMolycorp among others.

As global competition heats up over time for these resources, these scarce resources become more valuable and prices paid for them tend to rise. Whether you know it or not you feel that impact when you fill your gas tank up at local Circle K, Texaco or BPBP gas station.

Water – the next scarce resource. There is another scarce resource that impacts our daily lives even though most of us take it for granted. I’m talking about water. Data shows that even though we live on a planet that is covered in water, 97% of it is salty and nearly 2% is snow and ice. That leaves 1% to tend to our agricultural needs, to assist our power generation, and to provide for household drinking and bathing needs. In that 1%, the worlds 14,450 desalination plants produce 16 billion gallons of water daily. Per Harvard Business, by 2030, water supplies will satisfy only 60% of global demand - and less than 50% in many developing regions, where water supplies are already under stress. Governments will have to manage demand by raising the price of water or capping the amount users can draw.

In short, the looming problem here is one of scarcity and the ripple effects it will have. In a world where demand for water is on the road to outstripping supply, companies will struggle to find the water they need to run their businesses. We have already seen minor instances – in 2004, PepsiCoPepsiCo and Coca-ColaCoca-Cola closed plants in India whose local farmers and urban interests believed were competing with them for water. In 2007, a drought forced the Tennessee Valley Authority to reduce its hydropower generation by nearly a third. Some $300 million in power generation was lost. Just this week, there are reports that “dirty ice” found at Chinese KFC restaurants — think Yum BrandsYum Brands — and McDonald’s were riddled with bacteria — far more than toilet water.

U.S. water system — gets a D grade. The U.S. is not without its own water concerns. A report recently released by the U.S. Environmental Protection Agency showed that $384 billion in infrastructure improvements are needed to continue providing safe drinking water. At the same time, capital investment needs for the nation’s wastewater and stormwater systems are estimated to total $298 billion over the next 20 years.These and other facts were revealed in the 2013 report card for America’s Infrastructure, which gave a grade of D to both our drinking water and wastewater infrastructure.

PowerTalk on water and the water industry. Given the looming threat that face our water system as well as the indirect impact to be had on business, I spoke with Debra Coy, principal at Svanda & Consulting and an advisor at XPV Capital. While those are Debra’s current titles, she has been following or involved with the water industry for more than 25 years as an equity analyst at firms such as Janney Montgomery Scott, The Washington Research Group, HSBC Securities and others.

During our PowerTalk, Debra gives a great overview on the water industry and its many facets, from equipment companies like Xylem (XYL) and PentairPentair to water utilities such as American Water WorksAmerican Water Works and Aqua America (WTR). We also talk about the looming water crisis, water’s role not only in the home but in industrial and other manufacturing uses (such as semiconductor manufacturing and pharmaceuticals) and how more and more companies around the globe are making critical decisions, such as where a new facility may or may not be located. That’s right, access to water is becoming a key consideration in economic development, and that means jobs.

How to profit from this water pain point. Given the demands and need to update if not overhaul the existing water infrastructure in the U.S. and around the world, Debra mentions two companies that are well positioned to capitalize on this water pain point — Xylem (XYL) and IDEX. She also points out that investors looking for a more diversified way to play this should look at the Powershares Water Resource Portfolio ETF (PHO), which has 60% of its holdings in industrial related water companies and more than 23% in water utilities like American Water Works and Aqua America.

While water may be something you’ve have taken for granted, if you’re a consumer or an investor the looming water crisis is something you can’t afford to ignore any longer.

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parch states, keep your eyes off of our Great Lakes..you have no right to steal our water, and, you certainly don’t deserve to, given your failure to use simple, basic, but effective conservation methods you could have been using all along.